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Shippers Conditions Index Reflects Slowly Tightening Capacity

FTR Associates' Shippers Conditions Index for August fell to a reading of 6.8 reflecting a slowly tightening capacity environment for carriers and shippers.

With an economy that continues to tread water, FTR expects the SCI to remain close to the current reading through the fourth quarter of this year.

According to FTR, Shipping costs, along with the ability to find capacity, will begin to grow worse in 2013 as economic conditions improve just as new Federal regulations affecting trucking are implemented. The SCI readings will reflect the added challenges facing shippers at that time. As the SCI readings continue to worsen, this is actually good news for the trucking industry as this means have more leverage to raise rates.

Larry Gross, Senior Consultant for FTR, commented, "Attendees at the recently concluded FTR Transportation Conference concurred that freight markets currently are mired in a sluggish but stable state. Disciplined carriers are therefore holding back on any capacity additions, setting the stage for tightening as conditions evolve through the early part of next year. Barring another significant stumble in the overall economy, we expect things to look substantially different a year from now."